The do’s and don’ts of online auction trading, plus a list of other eBay scams to beware of: Internet Scambusters #322

With up to 20 million items on sale at any one time, and tens of billions of dollars changing hands every year, eBay scams are a real risk for anyone involved in online auction trading.

But, by observing a handful of safeguards and knowing where the greatest risks lie, you can reduce or even almost eliminate your chance of getting scammed. In this week’s issue, we list 23 stay-safe tips.

And now for the main feature…

eBay Scams — 23 Stay-Safe Tips To Keep You Out of Trouble

You only have to do a quick search of Scambusters articles to discover that eBay scams are one of the biggest categories of online fraud. See this article on online auction scams, for example.

Trying to discover the scale of the crime is a different matter. The company itself doesn’t publish statistics but has claimed in the past that only 0.01% of transactions result in a confirmed case of fraud.

That may not seem like much, but when you consider that at any one time there are between 18 million and 20 million items on offer, that still works out at up to 2,000 potential scams on the go right now, as you’re reading this!

In the UK, 8,000 eBay related crimes were reported to police in 2007. And last year in the US, the FBI’s Internet Crime Complaints Center (ICCC) said that more than half of all online fraud complaints were about auctions.

And that’s not the only problem. In addition, every day, crooks send out hundreds of thousands (or perhaps even millions) of bogus emails, pretending to be from eBay. Most of these have links to eBay look-alike pages, which are used to phish for sign-on and other personal information.

To be fair, the online auctioneer, which has more than 200 million members and sells tens of billions of dollars worth of stuff on a couple of dozen sites worldwide every year, is doing a good deal to cut the risk of scams.

For instance, it has its own downloadable anti-fraud toolbar, and people who sell what are regarded as high scam-risk articles, like computers, can no longer insist on cash or check payments; they must also accept PayPal or a credit card.

It encourages the use of its own PayPal payment service, which keeps credit card information away from prying eyes.

The firm itself also offers lots of advice, including tutorials on how to avoid being conned. Using this and other security information sources, we’ve pulled together a list of 23 eBay stay-safe tips.

Follow this advice and you’ll substantially reduce or even almost eliminate the chances of becoming an eBay scam victim.

First, here are the things you must ensure you do…

Do:

Keep a close eye on your “My eBay” page to make sure no one is using your account to trade.

Always log in to both eBay and PayPal manually. Don’t use the auto sign-on. Use different passwords for your eBay and PayPal accounts and change them very regularly.

Seek further information and pictures of an item. The more costly, the more determined you should be to verify the details and the more you should want to know about a buyer or seller. You can actually get full contact details, including address and phone number, of someone you’re dealing with before paying for or sending an item.

Read the fine print. Always check a seller’s return and refund policy and read every word of the article description and other details.

Consider using a PayPal security key, which you can buy for $5 and which generates a random temporary security code that has to be used for logging on to your eBay or PayPal accounts.

Check out prices (both on and off eBay) for similar items you are buying or selling, to get a clear idea of what might be a reasonable sum.

Use a shipment tracking method when sending items of value. If you’re a buyer, insist the seller uses such a method, even if you have to pay for it.

Keep copies of all correspondence relating to a sale along with photos of an item before you ship it.

If you’re a seller, use some form of identifier that can only be removed once the buyer accepts the item. Your returns policy can state you will only accept items back with this identifier intact. This prevents fraudulent returns of lesser value items.

Now, for the things you should make sure you DON’T do…

Don’t pay by instant cash, cash transfers or money wires like Western Union or MoneyGram. They can’t be tracked and traced. Even money orders and checks are not safe. For preference, use credit cards or PayPal, which offer fraud protection (although be sure you completely understand PayPal’s rules before you use this service).

Don’t reply to or click on links in emails that seem to come from eBay, including Second Chance Offers that sometimes arrive after you’ve been outbid. Instead, sign on to your account. If it’s a genuine communication, it will be listed in “My eBay.”

Don’t click on links that sellers provide in their listings. Instead, if the link supposedly offers more information or a download, do your own online search instead. (eBay’s own links, such as those for more pictures or shipping methods, are usually OK.)

Don’t buy collectible items about which you’re not already an expert. You must be able to distinguish between fake and genuine. The jeweler Tiffany once claimed that almost three-fourths of all items bearing its name sold on eBay were fakes.Here’s more info on antique and collectible scams.

Don’t agree to deal with a buyer or seller outside of the eBay trading environment. You’re at risk, without any protection.

Don’t accept an overpayment for an item, in which you’re asked to remit the difference to anyone. You can find more on overpayment scams on our site.

In addition, here are some pointers of eBay activities you need to be aware of…

Beware of:

One-day or even three-day listings. Some quick sales are perfectly legit but scammers also like to use them.

Overseas-based sellers or buyers, especially those in Africa, eastern Europe and Italy. Again, there are certainly legit ones (although rarely from Africa), but definitely be skeptical and cautious.

Sellers who don’t accept credit cards or PayPal, or buyers who send a check and insist you send the item before the check has cleared at the bank.

Phony bidders who compete against you to force up the price. Make your bid towards the end of the auction.

Sending items to buyers whose address has not been verified by PayPal.

Seller feedback. By all means use this important way of checking a seller’s reputation, but be aware that hackers have been known to take control of legitimate accounts or at least pass themselves off as reputable traders in phishing emails.

Escrow services — where the buyer deposits the money with an independent third party pending receipt of the sold item. If your buyer or seller suggests, or more especially, insists, on a certain escrow company, check them out independently by phone (don’t trust a website) and with your state licensing body. We recommend you use eBay’s approved escrow company, Escrow.com.

Sellers with Private Sales. They may be legit, but remember you don’t get to see what they’ve previously sold and what feedback they’ve received

Despite these guidelines, there’s always a risk of you or someone you know being caught by an eBay scam. As soon as you suspect, report it to eBay and to PayPal (if the service was used). eBay has dispute services.

And as soon as you know for sure, tell your local law enforcement authorities and report it both to the ICCC and the consumer watchdog, the Federal Trade Commission.

There’s an old phrase that’s been used in the world of commerce for centuries. In legal jargon, it’s called “caveat emptor.” To you and me, it means “buyer beware.” With eBay, the same rule also applies to sellers.

If someone or something seems suspect, it/he/she probably is. Always remember and apply that, and follow our tips, and you’ll be a long way down the road to staying safe when you trade online.

That’s all we have for today, but we’ll be back next week with another issue. See you then!

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